On Thursday the Association of American Publishers released its latest Statshot report on revenues of the US book publishing industry.

Trade book sales for the 1,200 odd publishers who submit their data to the AAP were up 3.4% for the month of April, but still down 4.5% for the year.

Paperback and audiobook revenues increased the most in April 2016 (21.5% and 20.4%), respectively) while sales of hardback books were up 2.6%. eBook revenues were down 22% for the month of April.

For the first four months of the year, ebook and hardback revenues were down (21.7% and 5.2%), while paperback revenues were up 9.9% and audiobook sales were up 31.4%.

In other words, the Big Five are having some success in shifting ebook buyers back to print, but they are still being stymied by Amazon’s decision to drive down the price of hardback books last summer.

Price elasticity has been demonstrated in lots of industries. Many authors and publishers assured us it didn’t apply to books because books were special, books were unique, and books didn’t compete with each other.

In my case, traditional publishers have succeeded in training me to avoid their books. I used to have a list of about a dozen “must-buy” authors and twice as many “may buy” ones. As soon as ebooks came out and their prices became outrageous, that list is down to about three “may buy” authors; I won’t pay $15 for an ebook unless it’s something special. And I won’t buy hardcovers because they simply are too cumbersome – I’m out of shelf space, moving with 50 boxes of books is too much of a pain, and I can read my Kindle in bed with the lights off. And I don’t buy books for the way they smell, either.

Most of my casual reading now comes from Kindle Unlimited. I get to try many new authors since the cost is basically my time (on the other hand, I’m also far more willing to stop reading something that doesn’t keep my attention after a few chapters). My actual purchases go to reasonably-priced ebooks ($9.99 for traditional, $5.99 for indie is my cutoff). Haven’t bought a printed book since 2014. Granted, this is anecdotal, but I suspect I’m not the only reader who has made a similar shift in buying patterns.

I think I am down to one author that I will pay over $10 e-book prices. We have a fabulous public library system, and I put other authors that used to be on my auto-buy list as soon as the library system puts the forthcoming in their system. Then I get the e-book a year or so later when the prices become reasonable.

I’ve purchased only one print book since 2009, and that was to pass it on to a relative because I’d read it before and like it. Agency pricing is not my favorite thing in the world, but I do admit I willingly buy ebooks that cost $14.99 or thereabouts. But a book lasts me a long time, entertainment-wise, because I read so slowly.

“In other words, the Big Five are having some success in shifting ebook buyers back to print, but they are still being stymied by Amazon’s decision to drive down the price of hardback books last summer.”

i really can’t understand this statement. the ebook sales are lower and the print sales are up (as they claim they want)…. why is there a complaint about the hardback sales at amazon?

I am an accountant, so I am really not stupid about money things… but I am having a hard time even imagining what they think they are saying.

Print sales are not up as much as ebook sales are down, so total sales are down. That’s not connected to Amazon discounting hardbacks, however. It could be they’re complaining that lower hardbacks are slowing the switch from ebook to paperback they wanted, but if readers are switching away from ebooks it doesn’t really matter what they switch to — as long as they stay in the stable, which they aren’t. Or they could be bemoaning that total money spent on hardbacks is not as much as it could be if Amazon didn’t discount, but Amazon discounts from their cut. The publishers get the same per copy sold whether Amazon discounts or not.

I truly do not understand why they think lower hardback prices are stymieing the desired shift from ebook to print. I’m not sure they understand their own thinking.

That’s probably because they aren’t thinking. They are just clutching at the first superficially plausible narrative that appears to justify their raw emotional response to a decline in their business.

Does the AAP report final retail sales dollars or wholesale sales dollars or list price sales dollars? I think it would be very difficult to track what retailers sold each book for but very easy to track what they bought each book for. The AAP doesn’t strike me as an organization that takes the difficult path.

I’m not sure right now if the ABA reports reader-extort and the AAP reports wholesale or vice-versa. In this case it makes little difference because Amazon gets lower wholesale than anybody this side of Costco.

Based on the ease of each organization collecting information, I would guess it’s ABA reports actual retail and AAP reports wholesale.

Given KKR’s recent series included a contract that defined the standard distributor discount as “deep discount” which triggers 1/4 royalties, I wonder how many author contracts out there have a deep discount royalty reduction clauses triggered by Amazon’s wholesale terms.

It’s a context thing.
The ostensible reason the BPHs fought for higher ebook prices was to “protect B&M bookstores” from Amazon. The claimed they didn’t like that most people buy their ebooks from Amazon. It made them too dependent on Amazon.

However, because they didn’t pricefix pbooks, Amazon’s response was to cut pbook prices sacrificing margin for market share so all the BPHs have achieved is to drastically reduce their own ebook sales (while driving ebook customers to Indies and other competitors) and *increased* their dependency on Amazon.

The way it has played out in the marketplace (discussed here and at the source often enough in the past year) is that, faced with BPH ebooks priced higher that the print edition, readers have:

1- paid the higher price but bought less BPH ebooks, without going back to print

or,

2- refuse to pay the higher price and decide to wait for a cheaper edition (by which time they might have forgotten about the book)

3- refuse to pay the higher price and instead waitlist it at the Library

4- refuse to pay the higher price and buy some other ebook (increasingly from Indie publishers)

5- refuse to pay the higher price and go for the cheapest pbook source, Amazon.

5a- refuse to pay the higher price and go for the cheapest pbook version at Amazon, *used* books

What the publishers failed to factor into their scheme was that people shopping for ebooks are *already* online so raising ebook prices was never going to drive hordes of buyers away from ebooks to B&M. All they did was drive determined buyers to shift from online ebook to online print.

Side effect: Apple, Kobo, and Google don’t sell pbooks so lost ebook sales to print at those stores are net losses to the store, while Amazon and B&N still made the sale, one way or the other.

So, with a bit of aggressive pbook pricing Amazon sabotaged the whole ebook-to-print stampede the Manhattan Mafia had planned.

Their ebook competition (more dependent on BPH titles than they are) is weakened, their print book sales have grown dramatically, and they now sell well over half the trade pbooks in the land as well as 75% of ebook sales.

The minimal rise in pbook sales the AAP reports? It comes from Amazon pbook sales jumping some 20% year over year. Which means everybody else is actually selling less pbooks.

For comparision, back in 2010 when the BPHs started the price fixing conspiracy, Amazon held about a 20% pbook share and a 56% ebook share.

The BPHs’ war on Amazon has been positively Nietzschean. Instead of killing them, they’ve made them stronger.

Well. For, what I believe is the 34th month in a row, in our rural library system, our August paper circulation is down a few points over the previous year, electronic circulation is up more points, and total circulation is up slightly.

In our world, price has nothing to do with lends. And we know that our ebook delivery is not great. Our customers can usually get a popular book faster by reserving a paper copy online and picking it up at a branch because the library can’t afford to buy enough ebook licenses to keep the ebook hold queues short. That factors instant delivery out of the picture. And you don’t have to store library books at home, so compact storage is not a factor either.

I don’t know what other libraries are experiencing, but I conclude that our customers “vote with their feet” for the ebook reading experience. Not the price, not the instant gratification, not the storage, but the experience.

The problem at our library is that a ebook borrower clicks a few times, then waits three weeks for the book to be delivered to their device if the book is popular. That is because ebook licenses are so expensive we can only afford a few for each book. If we have 3 licenses, only 3 readers can have the book at one time.

The economics of paper books are such that we can afford to buy more copies. When a customer requests a popular paper book, they get it sooner than an ebook copy. Unused ebook lends are sunk, but extra paper copies can be sold through our Friends of the Library stores for a small recovery.

Makes no sense, but it’s the facts.

With this headwind, (extra transaction cost) our borrowers are still drifting toward ebooks. There are fewer reasons for our library borrowers to favor ebooks than Amazon customers have to favor ebooks, yet our library borrowers still seem to be trending to ebooks in our system.

Again, I don’t know what other libraries are experiencing, but this has been consistent since 2013. I should say, that ebooks are still only a small percentage of our overall circulation, but they are growing and paper circulation is not. One possible conclusion is that people don’t like to go to the library any more, but our event attendance is trending up also.